Jerry Taylor writes in to respond:
Changes in the supply of or demand for oil rocket through international oil markets at lightening speed — to the great distress of many. In fact, oil markets may very well be among the freest in the world, if a market is defined as free to the extent to which price signals are accurate and reach consumers directly without distortion.
Simply because OPEC has market power, does not mean the market isn’t free. If OPEC controlled oil prices, why would they have let the price fall to $10 a barrel in 1998–9? Or let it drop from $70 per barrel to $50 several months back? Were they just being nice?
The argument that ethanol enhances national security is implicitly an argument that ethanol is a more reliable source of supply than foreign oil. That is false. Corn harvests vary twice as much as oil imports, as argued here.
I discuss the foreign-policy rationale for “energy independence” here. I remain unpersuaded.